Benefits managers should ensure they know as much as their corporate advisers do about how to search the market.
Speaking in the session ‘How to carry out a benefits review and tender process’, Jane Richards, group HR – remuneration and benefits at The Royal Bank of Scotland Group, drew on her experience in her previous role at BDO.
She advised delegates to be close to their corporate advisers and to know the adviser’s job almost as well as, if not better, than they do “so you can ask the right questions”.
She pointed out: “It is not always more expensive to use an intermediary [to source benefits].”
Sometimes using third-party help will cost more than doing it yourself, but often the overall cost is lower or the same.
Also, corporate advisers have the advantage of buying power as well as more muscle to get problems sorted out when working on behalf of several clients. This is one of the key reasons she “would warn you not to align yourself to a broker with only one or two providers”.
She also pointed out that all benefits managers should be fully aware of exactly how their corporate adviser is being remunerated, be it fees or commissions. “Don’t pay both. It is important that you know what you are paying.”
However, there are some benefits Richards would always buy directly herself, these include travel insurance, private medical insurance and childcare vouchers.
She also recommends that although “if you don’t ask, you won’t get”, benefits managers do not squeeze too tightly when it comes to cost negotiations, otherwise the supplier may be forced to cut back on service or quality.
When trying to cut back on costs, it is best to focus on the benefits where the biggest cost differences can be made, it is not worth the time and effort just to get 1% off a low-cost benefit.
It is also important to look at the services that will take up most of your time (and therefore money) and ensure that the service level agreements and back-office support is really good, even if you have to pay more for this.
When dealing with advisers: “Goodwill goes a long way. If things go wrong you need flexibility - you need to look to long term relationships.”
Internal relationships are important too. “It is important to be close to your accounts payable team so invoices are paid quickly. For example childcare vouchers will not release vouchers until the invoice is paid."
“No one in compensation and benefits likes an angry payroll manager” so make sure you get the payroll team involved early.
